VF Corp. CEO exit, trimmed forecast prompt Credit Suisse downgrade
VF Corp. (NYSE:VFC) lost a bull on Monday as Credit Suisse voiced concerns on the sudden executive transition and trimmed outlook announced on Monday.
While equity analyst Michael Binetti indicated that he remains confident in the long-term prospects for the company, the sudden spate of new developments for the company necessitates a move to the sidelines at present.
“The abrupt CEO transition and lack of clarity on which brand is seeing incremental pressure add too much near-term uncertainty and reduces our conviction calling for a rotation into the stock on a view that EPS is truly bottoming,” Binetti told clients. “On fundamentals…even if VFC can clear Vans inventory soon, we don’t see VFC in a reasonable position to start guiding to positive YOY Vans order books until at least Fall ‘23/Spring ’24.”
He added that while the CEO transition could attract “strong talent” to steward the brand’s portfolios, there is no certainty that this will be the case at present. As such, the shift to Neutral from a prior Buy is appropriate.
Alongside the downgrade, Binetti cut his price target to $28 from a prior $36. Shares of the apparel and footwear manufacturer fell 10.52% near midday on Monday.
Read more on the trading trends for footwear and apparel stocks on Monday.